Mexico Marijuana Legalization

There is growing expectation that Mexico will eventually legalize marijuana for recreational use, allowing the country to enter the legal weed market and start generating significant revenues. When this does finally happen, sophisticated cannabis operators will surely flock south of the border to open dispensaries and savvy investors may take a long, hard look at cannabis real estate investing options in Mexico. But recent developments indicate that it still might be a while before Mexico makes it legal for residents to purchase recreational cannabis.

Recreational Marijuana and Medical Marijuana Legal in Many Countries

Medical marijuana is currently legal in dozens of countries, but just two countries have legalized recreational marijuana: Uruguay in 2013 and Canada in 2018. A number of U.S. states and territories have legalized cannabis for recreational use, but the vast majority of states still prohibit recreational cannabis sales. While many countries have already legalized medical cannabis, the legalization of recreational cannabis in these countries has taken a bit more time. This is an important distinction because the need to wait for a physician’s prescription is still a major inhibitor on legal cannabis sales.

One of the driving forces behind the push to legalize cannabis for recreational use in Mexico and other nations around the globe is that recreational marijuana sales provide a huge boost to national economies. In the United States, the states that have legalized recreational marijuana have already seen the positive effects it can have on their local economies. For instance, Colorado recently set an all-time record for legal cannabis revenue in a single month, which means more tax dollars for the state.

Global Cannabis Market Is Booming

Global sales of marijuana have more than tripled since 2014, when several U.S. states first started to legalize cannabis for recreational use. In 2018, worldwide sales of cannabis totaled nearly $11 billion. This figure is expected to reach as high as $50 billion annually by 2030, with a large percentage of legal weed sales and the bulk of retail marijuana revenue coming from the United States and Canada.

One North American country that is not yet generating legal cannabis revenue is Mexico. That’s because Mexico has yet to legalize marijuana for recreational use. But there is a belief among many industry observers that Mexico will be the next country to legalize recreational cannabis.

How Long Before Mexico Legalizes Recreational Cannabis?

In 2018, the Mexico Supreme Court ruled that the government could not ban the possession or use of marijuana because doing so would be a violation of the Mexican constitution. This was actually the fifth time that the highest court in Mexico had issued such a ruling in favor of recreational cannabis. But this did not mean that retail dispensaries could start opening across the country and selling cannabis and cannabis-related products. First, Mexican lawmakers would have to pass legislation for the regulation of the cannabis industry within the country’s borders.

Unfortunately for cannabis operators looking to establish a presence south of the border, legislators have taken their time crafting the legislation required to create a legal cannabis market in Mexico. The Mexico Supreme Court sensed that the legal framework would not be finished before an October 2019 deadline, so the court extended the deadline to the end of April 2020. Now, once again, the Mexican Supreme Court has extended the deadline for legalizing recreational cannabis in the country: lawmakers now have until December 15, 2020 to officially end the prohibition of recreational cannabis in Mexico. This extension was deemed necessary because of delays caused by the coronavirus pandemic, which has shut down many businesses in Mexico and limited the ability of legislators to convene.

What Will the Mexican Cannabis Market Look Like After Legalization?

Cannabis retail operators will likely be very interested in exactly what shape the finalized legislative proposal looks like when Mexican lawmakers eventually get around to passing a law to legalize recreational marijuana. Some of the most important aspects of any cannabis law are likely to include:

  • Possession of small amounts of marijuana will be decriminalized.
  • Adults who are 18 years and older will be legally allowed to purchase cannabis for personal use.
  • Adults will also be able to cultivate cannabis for personal use, with certain limitations on the number of registered marijuana plants and the weight of marijuana yield annually.
  • Cannabis businesses will be able to apply for licenses to sell marijuana in retail dispensaries. These cannabis business licenses would be issued by the Mexican Institute of Regulation and Control of Cannabis.
  • Cannabis sold at Mexican dispensaries would be subject to taxation at a rate of 12%.

Certain other aspects of cannabis legalization in Mexico remain unclear. For instance, it has not yet been determined whether marijuana edibles and marijuana-infused drinks will be legalized as well.

Contact Scythian Cannabis Real Estate

Although recreational marijuana is not yet legal in Mexico, it is legal in Colorado, Illinois, Michigan, and several other states in the U.S. Scythian Real Estate is a full-service real estate partner to some of the biggest cannabis operators in the United States. Scythian also manages a growing real estate portfolio focused primarily on retail marijuana dispensaries. For more information, email Scythian Real Estate today.